Know the major changes in the new law on tax procedures in Rwanda
The Government of Rwanda recently gazetted the Tax Procedures Law no 020/2023 of 31 March 2023. The new law replaces the Tax Procedure Law No 026/2019 that has been in use. Among other changes stipulated in the law include but not limited to the following;
Reduction of interest rates for non-declaration of tax
According to the new law in its article 80, in case taxpayers declare taxes on the due date but fail to timely pay the declared taxes, the applicable interest rates were reduced as follow; 0.5% when the due taxes were not paid for a period not exceeding 6 months, 1% for the period between 6 and 12 months and 1.5% for more than 12 months. Previously the interest rates for the late payment were fixed at 1.5% and calculated monthly.
Further still, in article 81 of the new law, the administrative fines imposed on micro enterprises (whose annual turnover is less than 2 million Rwf) has been reduced from Rwf 100,000 to Rwf 50,000, for any person who fails to provide information on time, one who does not provide information or who provides incomplete, incorrect or misleading information following a request of the Tax Administration.
Appeal to the Commissioner General
Regarding the appeal to the Commissioner General, Article 51 of the new law stipulates that a taxpayer who is not satisfied with the contents of the tax assessment notice or notification of administrative fine appeals to the Commissioner General against the disputed amount within a period not exceeding thirty days from the day of receipt of the notification.
In this case, the Commissioner General suspends the collection of the tax that is subject to appeal if the taxpayer who is making the appeal has paid the undisputed portion of the tax.
Seizure of the property of a taxpayer
Contrary to the previous law, the new one has introduced a provision allowing taxpayers 15 days from the day their property is seized to apply to the Tax Administration for authorization to sell the seized property by themselves in order to clear tax due.
The taxpayer is granted 90 days from the day of receiving feedback on their application to sell the property and clear the tax due.
Commenting on these changes, Mr. Jean Paulin Uwitonze, the Assistant Commissioner in charge of Taxpayer Services and Communication who is also the spokesperson of Rwanda Revenue Authority, said: “The law procedures was reviewed in order create an attractive ecosystem for investment in Rwanda, to comply with international standards, and to fill certain gaps identified in the Law no 026/2019 of 18/09/2019 relating to tax procedures.”